Why Does Trading Have Such Patchy Success?
The economic theory behind spectrum trading is that it should create a more open market by making it quicker and easier to get access to the airwaves. If spectrum can only be licensed by a regulator or government, then it is usually illegal to sell it to someone else directly or the only way would be to sell the whole company. This has what economists call high transaction costs – the outlay associated with making this sale may be so great as to outweigh any benefits. Transferring the spectrum assets into a new spectrum-only company which could be sold would involve expensive legal costs and a timeconsuming administrative burden.